"When I get bummed out, spending money gives me the high, but the high doesn't last for long. Usually, the next day, I'm like, 'Why did I spend that money?' "

While she recognizes her problem, she hasn't been able to break the cycle.

Facing possible bankruptcy about a month ago, she decided to do something about it.

Thumbing through the phone book, she came across Community Financial Counselling Services (CFCS) -- a United Way-supported non-profit that helps people like her get out of debt and set a course toward financial stability.

Kim -- who did not want to give her full name -- has since been working with the organization and recently attended a CFCS workshop on behavioural finance, offered as part of its ongoing activities for Financial Literacy Month.

Her debt counsellor, Sally Massey-Wiebe, ran the seminar, titled Is It Just About Money?, which aims to help people better understand how their behaviour and attitude toward money can affect their financial well-being, for better and for worse.

More often than not, Massey-Wiebe says, CFCS counsellors find people's financial troubles are not a question of simple mathematics -- earn more and spend less. Our upbringing, environment and emotions play important roles in our financial health.

Kim says the workshop offered fascinating insights into what triggers her wanton spending. But more importantly, what she learned will help her identify and manage the patterns of behaviour that have caused her so much pocketbook grief.

If her story sounds a little like yours, or you're just curious what drives you to make financial decisions, here's a brief overview of the science behind your mind on cash.

A crocodile, monkey and scientist

It sounds like the beginning of a bad joke but, financial psychologist Dr. Brad Klontz writes in his book Mind Over Money, this trio represents the brain's different roles. The crocodile deals with threats. It's impulsive and reactive. The monkey is curious, emotional and social, and the scientist is the rational and analytic part. Massey-Wiebe says the animal components often react to stimuli -- like shiny, new items on sale -- very quickly. As a result, the scientist may have less input in the decision-making process than we realize. Another way of thinking about this is to envision our conscious mind as a rider on an elephant. The big beast is the primordial part of our brain -- all those things dealing with fighting, fleeing and feeding. The rider tries to control the pachyderm to our benefit. "Things are great when our elephant is on the path the rider wants it to be on, but when it doesn't, there is only so much willpower to hold it in check," she says. "That's often how our brains work with money issues, and when we think about the decisions we make, quickly we realize -- my goodness -- the elephant is in charge."

The economic theory of relativity

Our brains are built to make comparisons. Otherwise we wouldn't live very long because we wouldn't be able to tell right from wrong, up from down and, most importantly, safe from dangerous. But grey matter can be tricked fairly easily. For instance, we can mistakenly think two identical items are different when they're placed in different contexts. Massey-Wiebe says this system glitch often negatively affects our behaviour with money. More specifically, our satisfaction with money is often a measure of context, which in turn can result in a lot of unhappiness in a world where wealth equates to status.

If John, for example, earns $35,000 and knows he is the highest-paid employee at his workplace, he will likely feel a greater level of satisfaction than someone earning $45,000 -- doing the same job -- who knows he is the lowest-paid employee. But that sense of satisfaction will likely not persist if John knows how much less he's being paid than the lowest-paid worker elsewhere. "Very quickly, we adapt to our new normal and we start looking for another comparison," she says. We are hard-wired to try to keep up with the Joneses, which isn't necessarily problematic. The tension between satisfaction and yearning helps us improve our lives. But it is only beneficial as long as we don't get caught up in buying bigger and better 'stuff' just because that's what our peers are doing.

The power of the one-person herd

We are creatures of habit and when those habits are good, we do well. But when we pick up bad ones, they can be hard to break. Furthermore, despite our sense of individuality, we often behave like pack animals and this can affect our spending habits. Indeed, this is a little like wanting to be like Mr. Jones and Co., only more basic. We often base our first decisions regarding a problem based on what others have chosen to do in a similar situation, Massey-Wiebe says. The thinking goes a little like this: "Everyone is trying that new coffee shop at work, so maybe I should, too -- even though it's a little pricey." That's how many first decisions get made, and it's a fairly rational thought process. "The coffee is good -- my peers validate that -- and it's Friday, so I will treat myself just this one time." Once we make that first step, however, the ones that come afterward involve much less consideration. In effect, we self-herd ourselves into repetition. "It doesn't take long before you stop thinking about it as a conscious choice every time." And this is how people can get stuck in cycles of bad money habits. "It's really important we recognize, when faced with new financial decisions, how these first choices can be very, very powerful," she says.

The high cost of free

Everybody likes a freebie. Marketers know that all too well. And it's hard to argue against the inherent value of getting something for nothing. Yet even the notion of getting something for free will often bypass our good sense, Massey-Wiebe says. Just think of all the ads for "buy one, get one free." Behavioural psychologist Dr. Dan Ariely, author of Predictably Irrational, set out to prove in an experiment just how easily a freebie can derail our rational thought processes. Participants had the chance to buy a Belgian chocolate for 15 cents or a Hershey's Kiss for one cent. In most cases, they went for the better-quality chocolate even though the inferior candy was considerably cheaper. Then, another group was offered the same chocolates, only the Belgian chocolate was 14 cents and the Hershey's Kiss was free. In this case, most picked the free chocolate despite the price difference being the same as the first situation. "Free is not always cheaper," Massey-Wiebe says. "We often will make decisions differently, but we often do not make (them) as rationally when 'free' is inserted in the equation."

Cold, hard honesty

Money keeps people honest, as long as it is cash and not plastic or some other derivative. Ariely has also proved this to be true in another experiment. He had students write a quiz of 10 math questions. They were then given the answers and asked to hand over their results. This was the control group. They had no choice but to behave honestly. A second group was offered $1 for every answer they got correct, but they did not have to reveal their work to receive the money. Predictably, their percentage of correct answers increased from the control group. Then a third group was asked to do the same, but for each correct answer they received a token they could exchange for real money. As it turned out, they cheated the most. Massey-Wiebe says his findings reveal that our increasingly digitized world of finance makes it easier for all of us to be dishonest. We're also more likely to cheat on our budget when using debit or credit cards, buy-now-pay-later plans and other forms of commerce that don't involve actual cash. "There's something about the use of old-fashioned cash that forces us to think in a much more structured way about spending."

Habitude adjustment

In her award-winning guide Money Habitudes: A Guide for Professionals Working with Money Related Issues, Syble Solomon writes six money habitudes -- habits and attitudes about finances -- describe just about every facet of our relationship with the dollar. Generally, everyone falls into one or more of the following habitudes: security, status, selfless, free spirit, targeted goals and spontaneous. Each habitude has an upside. For instance, people who favour security tend to save, don't gamble much and budget well. But on the downside, they may choose investments that pay very low returns so their savings don't keep pace with inflation. Or they may save too much and spend too little, denying themselves and family members the opportunity to enjoy life. To think of habitudes another way, they are like computer codes that run in the background, Massey-Wiebe says. They're generally so ingrained in our behaviour we don't realize their effect on our lives. And many of these "money scripts" have been with us from a young age. "They develop when we have a naive understanding about money, but they may not be all that helpful as we develop into adults." It's a little like a commonly told story about an Easter ham, she says. Every Easter a woman cuts off a third of the ham before putting it in the baking pan. One year, her husband asks her why, and she replies, "I don't know. It's just the way my mom did it." So they call her mom to find out, and she tells them, "I had to cut off a third of the ham because the pan was too small." Massey-Wiebe says the story concisely sums up one of the biggest challenges for counsellors when working with clients. "Anyone who helps you manage finances can show you new ways to cook the ham," she says. "But unless we help you recognize that you're cutting off a third of your ham out of habit even though you don't need to, you're still going to sit down to dinner with only two-thirds of a ham."

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